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Leaders from the Group of 20 are expected to endorse the Basel III requirements for banks at their meeting this week in Seoul, South Korea. However, Nout Wellink, chairman of the Basel Committee on Banking Supervision, said efforts to impose additional requirements on systemically important financial institutions could be watered down. "It is very well possible that countries will have the freedom to not demand extra capital requirements for all systemic banks," said Wellink, who is also head of the Dutch central bank.

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High-stakes negotiations with the most powerful economies await U.S. President Barack Obama as he attends the Group of 20 summit in Seoul, South Korea. A meeting with Chinese President Hu Jintao is expected to be closely watched to see whether the two nations can repair damage from a series of currency, economic and diplomatic disputes. Germany has signaled its intention to deliver a frank message to the G-20 about likely fallout from the Federal Reserve's $600 billion bond-buying program.

Leaders from the Group of 20 are expected to endorse the Basel III requirements for banks at their meeting this week in Seoul, South Korea. However, Nout Wellink, chairman of the Basel Committee on Banking Supervision, said efforts to impose additional requirements on systemically important financial institutions could be watered down. "It is very well possible that countries will have the freedom to not demand extra capital requirements for all systemic banks," said Wellink, who is also head of the Dutch central bank.

Nout Wellink, chairman of the Basel Committee on Banking Supervision, said he is confident that policymakers from the Group of 20 nations will come to agreement on details of proposed banking requirements at their November summit in South Korea. Wellink said questions remain on only a few issues. "I am confident that at the Seoul meeting we can solve" them, Wellink said. He also said banking supervisors are moving toward agreement on additional rules for systemically important banks.

Nout Wellink, chairman of the Basel Committee on Banking Supervision, estimated that proposals to reform banks' capital and liquidity requirements would reduce global economic growth by no more than 1 percentage point. Bankers questioned the accuracy of Wellink's estimate. "I don't know how you can know that. We don't know the levels and we don't know the details, so it's difficult to have a deep understanding of the effects," said the chief risk officer at a European bank.

Nout Wellink, president of the Netherlands' central bank and chairman of the Basel Committee on Banking Supervision, writes that banking reforms are critical to achieving a more resilient financial industry. To achieve this goal, the Basel Committee is implementing a global reform programme, which includes raising the Tier 1 capital base as well as a minimum liquidity standard. "Minimum capital and liquidity requirements will have to rise by a substantial amount over time," Wellink writes.